Community PV = Clean Electricity + Profits

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The number of modules used on the project was dependent upon the amount of funds contributed by investors. With enough investors, the roof space was fully utilized.

To qualify for the state’s highest production incentive, both the modules and inverters had to be made in-state. Since no commercial-sized inverter manufacturers are Washington-based, smaller string inverters assembled at a Washington manufacturer (Itek Energy) were used.

Beginner

The city of Bainbridge Island, Washington, has long been a progressive community with its efforts to preserve green spaces and control overdevelopment. Here, you’ll find solar-powered trash compactors, solar awareness campaigns sponsored by local residents, and even a net-zero neighborhood, with buildings that generate as much energy as they consume. Now, the city has another project to be proud of—a 71-kilowatt community PV installation.

The array came online in August 2012, and was seven years in the making. The idea took root at a solar energy forum at City Hall in 2005, where several attendees expressed interest in investing in solar-energy systems, but weren’t able to do so on their own property.

“People were saying, ‘I’d love to go solar, but my house is surrounded by trees,’ or ‘I’m not a homeowner,’ or ‘my roof is pointed the wrong way,’” says Community Solar Solutions (CSS) president Joe Deets, who was also in attendance that day. “There were all of these barriers.” Then someone asked about the possibility of using the roof of city hall for a community PV project.

While the interest in the project was widespread, there were a few obstacles to overcome before planning could begin. One was challenging a Washington State law prohibiting community-based systems. “At that time, leasehold prohibitions denied community solar projects,” Joe explains. “Putting solar somewhere other than on your property—and getting compensated for the energy it produced—was not allowed.”

However, state Senator Phil Rockefeller was also in attendance at the Bainbridge forum, and sat on an energy committee in the state senate. He contacted Deets about collaborating on legislation to permit for-profit community PV installations. After three legislative sessions and three years, Senator Rockefeller’s bill finally passed.

Another positive outcome of the state’s growing involvement in renewable energy law was the Renewable Energy Cost Recovery Incentive Payment Program. This performance-based incentive pays its largest incentive if Washington-manufactured modules and inverters are used. Combined with federal incentives, it created a profitable and secure local investment opportunity.

Kathleen O’Brien hadn’t been able to install a PV system at her property due to shading issues, but this project gave her the opportunity to directly participate in—and profit from—a renewable energy project. “This particular approach makes it accessible for people who normally wouldn’t invest,” Kathleen says. She already had a personal interest in solar, but when she saw the investment return numbers, it was an even easier decision.

In the end, the project attracted 25 investors. The investment levels ranged from $7,000 to $28,000 with the rate of return for each investor dependent upon their initial investment. Any excess energy produced by the array is monitored by the utility. Under the city’s lease agreement, a check is then issued to CSS from the utility. But the lion’s share of the investor’s dividend comes from the federal and state tax incentives. Instead of the utility writing a check to the state for taxes, a check is instead written to CSS. CSS is tasked with distributing all dividend funds to investors. In November, the project received a U.S. Treasury grant, a federal program that allows owners of qualifying projects to receive up to 30% of the eligible project’s cost. The funds from this grant were distributed directly to the investors with the amount each received dependent upon their investment level. This single grant put them well on their way to recouping their initial investment amounts.

CSS and the investor group co-own the equipment and lease the roof space from the city. That lease expires, along with the state’s production incentive program, in 2020, so the project participants have to recoup their investment within that time frame. After the lease expires, the city can either purchase the array from CSS at fair market value or request that it be removed from the roof. If removal is requested, CSS and the investors would be responsible for that expense. But until then, the investors will continue to receive dividends from both the electricity production and tax incentive programs.